The Fixed Assets and Lease Accountant is the financial architect of a cannabis company's physical infrastructure. In an industry defined by rapid expansion and high capital investment, this role ensures the accuracy and integrity of the balance sheet's largest assets. The position involves managing the entire lifecycle of tangible assets, from the complex construction of a state-of-the-art cultivation facility to the deployment of specialized extraction equipment. Simultaneously, this professional oversees a diverse portfolio of property leases, including prime retail dispensaries, large-scale processing labs, and corporate offices across multiple states. The role requires navigating the complexities of US Generally Accepted Accounting Principles (GAAP), particularly the lease accounting standard ASC 842. This ensures financial transparency, which is critical for attracting investment, securing debt financing, and maintaining compliance. The accountant provides the data that informs critical strategic decisions about capital allocation, operational efficiency, and market expansion, making this a pivotal role in the company's long-term financial health and growth trajectory.
The day's work begins within the general ledger, focusing on a high-priority capital project. The task is to reconcile the Construction in Progress (CIP) account for a new 100,000-square-foot cultivation and processing facility in a newly legalized state market. This involves a detailed review of invoices and collaboration with the project management team. The accountant verifies capital expenditures for specialized assets, such as the installation of an automated fertigation system, the purchase of 500 high-efficiency LED grow lights, and the commissioning of a Class 1, Division 1 extraction booth. Each cost is carefully scrutinized to ensure it meets the company's capitalization policy before being approved for inclusion in the CIP balance. Accuracy here is critical, as these costs will form the basis for future depreciation.
Attention then shifts to the company's growing lease portfolio. A newly signed lease for a flagship dispensary in a high-traffic urban area requires immediate attention. The accountant meticulously abstracts the 10-year lease agreement, identifying key data points: the monthly base rent, scheduled rent escalations, renewal options, and a significant tenant improvement allowance provided by the landlord. This information is entered into the company's lease accounting software. The software is then used to perform the complex calculations required by ASC 842, generating the initial right-of-use (ROU) asset and corresponding lease liability. The accountant prepares the opening journal entry to record these figures on the balance sheet, ensuring the company's financial statements fully reflect its long-term obligations.
The afternoon is dedicated to a physical inventory audit at a processing and packaging facility. Armed with a tablet and barcode scanner, the accountant walks the facility floor with the operations manager. They scan asset tags on high-value equipment, including a newly installed automated vape cartridge filler and a sophisticated CO2 extraction vessel. The physical count is compared in real-time to the fixed asset subledger. A discrepancy is noted for two industrial trimming machines that are no longer in use due to an upgrade. The accountant flags these assets for potential impairment or disposal, initiating a process to assess their fair value and record any necessary write-down. This hands-on verification prevents the accumulation of 'ghost assets' on the books and ensures depreciation is only recorded on actively used equipment.
The day concludes with a cross-functional meeting involving the finance and cultivation teams. The purpose is to determine the appropriate useful life for a new type of dehumidification system being installed in the flower rooms. The accountant facilitates the discussion, gathering insights from the head of cultivation on the technology's expected longevity and maintenance schedule. This collaborative input is crucial for establishing an accurate depreciation schedule that reflects the asset's true economic life. The decision directly impacts the facility's production cost and the company's reported profitability. The accountant documents the conclusion, providing a clear audit trail for the decision.
The Fixed Assets and Lease Accountant has primary ownership over three critical financial domains:
The Fixed Assets and Lease Accountant directly influences key business performance metrics through the following mechanisms:
| Impact Area | Strategic Influence |
|---|---|
| Cash | Provides precise data for capital expenditure budgeting and cash flow forecasting related to lease payments and asset purchases. |
| Profits | Directly impacts net income through the accurate calculation of depreciation and lease expense, ensuring profitability is not misstated. |
| Assets | Ensures the balance sheet reflects the true value of the company’s operational infrastructure by eliminating ghost assets and correctly valuing ROU assets. |
| Growth | Supplies the financial models with reliable data on asset costs and lease obligations needed to evaluate the ROI of new dispensaries or cultivation expansions. |
| People | Fosters a culture of accountability and financial discipline through close collaboration with operational leaders on capital spending and asset management. |
| Products | The assets meticulously tracked and depreciated by this role—from grow lights to extraction machines—are the very tools that create the company's products. |
| Legal Exposure | Mitigates risk of non-compliance with loan covenants by ensuring that financial ratios, often based on asset and liability values, are calculated correctly. |
| Compliance | Guarantees strict adherence to US GAAP, specifically ASC 360 for fixed assets and ASC 842 for leases, which is fundamental for audit success. |
| Regulatory | Provides accurate fixed asset listings and financial data often required by state cannabis control boards for licensing applications and renewals. |
Reports To: This position typically reports to the Controller or Accounting Manager.
Similar Roles: This role combines the duties often found in titles such as Property Accountant, Plant Accountant, or Capital Asset Accountant. In the vertically integrated cannabis industry, this accountant must be adept at handling the real estate lease portfolio of a retailer, the complex machinery of a manufacturer, and the agricultural assets of a cultivator. It is a hybrid role demanding a broader skill set than its counterparts in more traditional industries. Professionals with experience as a Senior Staff Accountant with a focus on fixed assets are also well-suited for this position.
Works Closely With: This position requires extensive cross-functional collaboration with the Director of Operations on capital projects, the Real Estate Manager on new lease acquisitions, and External Auditors during financial reviews.
Success in this role requires proficiency with a specific technology stack:
Top candidates for this role often come from industries with similar asset and lease complexities:
The role demands specific professional attributes for success:
These organizations establish the rules and standards that govern the daily work of this accountant:
| Acronym/Term | Definition |
|---|---|
| ASC 360 | Accounting Standards Codification topic governing the accounting for Property, Plant, and Equipment, including impairment. |
| ASC 842 | The current accounting standard for Leases under US GAAP, requiring most leases to be recognized on the balance sheet. |
| CapEx | Capital Expenditure. Funds used by a company to acquire, upgrade, and maintain physical assets like property, buildings, or equipment. |
| CIP | Construction in Progress. An account on the balance sheet that accumulates the costs of constructing a fixed asset before it is placed in service. |
| ERP | Enterprise Resource Planning. A type of software that organizations use to manage day-to-day business activities. |
| GAAP | Generally Accepted Accounting Principles. A common set of accounting principles, standards, and procedures issued by the FASB. |
| GL | General Ledger. The master set of accounts that summarize all transactions occurring within an entity. |
| MSO | Multi-State Operator. A cannabis company that has operations in more than one state. |
| PPE | Property, Plant, and Equipment. The accounting term for a company's tangible fixed assets. |
| ROU Asset | Right-of-Use Asset. An asset that represents a lessee's right to use an underlying asset for the lease term, as defined under ASC 842. |
| Subledger | A detailed ledger outside of the general ledger that provides specifics for a GL account (e.g., a Fixed Asset Subledger lists every individual asset). |
| TI Allowance | Tenant Improvement Allowance. A sum of money a landlord provides to a tenant to cover the costs of improvements to a leased space. |
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